First Time Buyer Mortgage Deal Good ? Bad?

HxBro

My wife and I are purchasing our hoping to buy our first house in a few months time. We have been offered 5.59% fixed for 5 years on a mortgage of around 145k with £999 arrangement, we are looking at houses around 165k (we have 20k deposit - fees etc).

We were offered upto 222k so we know we aren't going to be over stretching ourselves. The difference between what we are paying now for a 2 bed flat and the 3 bedroom houses we are considering isn't much (may actually be less if we get the price down on the house, and taking into account the difference in costs of living and council tax between the areas), so we get a much bigger living space and don't have to put up with annoying neighbours above us, so getting on the ladder makes sense to us at the moment.

Getting back to my initial question, is 5.59% fixed for 5 years a good deal for a first time buyer?

homer_j_3

its a good deal on face value.

Does it tick all the boxes for you?

HxBro

I think so, 5 years gives us the knowledge of how much money we'll be spending over that period, hopefully within 12 months we can start overpaying, and definitely after 24 months we know we can overpay if needed. The bank wanted us to take 5 years over a shorter fixed term.

Do you think it'd be worth trying to get the arrangement fee reduced, the bank wanted to put it into the mortgage, but to me that seems silly - paying off £999 over 25 years with interest, when we can pay it up front.

homer_j_3

You should add it and then pay off on day 1 of the mortgage if this is an option and you can do this within your overpayments.

You will not be able to reduce or negotiate the fee because that forms part of the pricing of the overall deal. If you want a lower fee then you may end up with a higher rate with the same lender.

That said there may be other lenders that will give you an equal or better rate for less fees. I am not saying there is for definite because I haven't looked or know your full details as such.

The rate looks competitive, you seem to have ticked the boxes, just consider what I said about the fees and you should be fine.